Saturday, August 13, 2011

AT&T on Thursday accidentally posted a filing (since pulled, available below) that called into doubt one of the core arguments for its buyout of T-Mobile. While it has publicly said it could only get to 97 percent coverage of the US population with LTE by spending $39 billion to buy T-Mobile, an estimate included in the document instead showed that it would only need $3.8 billion in network expenses to go beyond the 80 percent it wanted otherwise. Senior management claimed that the deal would let it "better absorb the increased capital investment," according to AT&T counsel Richard Rosen, but couldn't explain why spending ten times more on a T-Mobile deal made this sound.

The same document also notes unusual timing. AT&T had decided against building to 97 percent on the cost argument at the start of January but was already making a proposal to buy T-Mobile on January 15, two months before it reached a deal in public. Its process implied, though didn't confirm, that AT&T had withheld the expansion to make it an incentive to put in front of the FCC.